Executive summary

Executive summary

Electric mobility continues to grow rapidly. In 2018, the global electric car fleet exceeded 5.1 million, up 2 million from the previous year and almost doubling the number of new electric car registrations. The People’s Republic of China (hereafter “China”) remained the world’s largest electric car market, followed by Europe and the United States. Norway was the global leader in terms of electric car market share (46%). The global stock of electric two-wheelers was 260 million by the end of 2018 and there were 460 000 electric buses. In freight transport, electric vehicles (EVs) were mostly deployed as light-commercial vehicles (LCVs), which reached 250 000 units in 2018, while medium electric truck sales were in the range of 1 000-2 000 in 2018. The global EV stock in 2018 was served by 5.2 million light-duty vehicle (LDV) chargers, (540 000 of which are publicly accessible), complemented by 157 000 fast chargers for buses. EVs on the road in 2018 consumed about 58 terawatt-hours (TWh) of electricity (largely attributable to two/wheelers in China) and emitted 41 million tonnes of carbon-dioxide equivalent (Mt CO2-eq), while saving 36 Mt CO2-eq compared to an equivalent internal combustion engine (ICE) fleet.

Policies continue to have a major influence on the development of electric mobility. EV uptake typically starts with the establishment of a set of targets, followed by the adoption of vehicle and charging standards. An EV deployment plan often includes procurement programmes to stimulate demand for electric vehicles and to enable an initial roll-out of publicly accessible charging infrastructure. Fiscal incentives, especially important as long as EVs purchase prices are higher than for ICE vehicles, are often coupled with regulatory measures that boost the value proposition of EVs (e.g. waivers to access restrictions, lower toll or parking fees) or embedding incentives for vehicles with low tailpipe emissions (e.g. fuel economy standards) or setting zero-emissions mandates. Policies to support deployment of charging infrastructure include minimum requirements to ensure EV readiness in new or refurbished buildings and parking lots, and the roll-out of publicly accessible chargers in cities and on highway networks. Adoption of standards facilitates inter-operability of various types of charging infrastructure.

Technology developments are delivering substantial cost reductions. Advances in technology and cost cutting are expected to continue. Key enablers are developments in battery chemistry and expansion of production capacity in manufacturing plants. The dynamic development of battery technologies as well as recognition of the importance of EVs to achieve further cost reductions in the broad realm of battery storage has put the strategic relevance of large-scale battery manufacturing in the limelight of policy attention.

Other technology developments are also expected to contribute to cost reductions. These include the possibility to redesign vehicle manufacturing platforms using simpler and innovative design architecture that capitalise on the compact dimensions of electric motors, and that EVs have much fewer moving parts than ICE vehicles. As well as the use of big data to customise battery size to travel needs and avoid over sizing the batteries, which is especially relevant for heavy-duty vehicles.

The private sector is responding proactively to the policy signals and technology developments. An increasing number of original equipment manufacturers (OEMs) have declared intentions to

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electrify the models they offer, not only for cars, but also for other modes of road transport. Investment in battery manufacturing is growing, notably in China and Europe. Utilities, charging point operators, charging hardware manufacturers and other stakeholders in the power sector are also increasing investment in the roll-out of charging infrastructure. This takes place in an environment that is increasingly showing signs of consolidation, with several acquisitions by utilities and major energy companies.

Global EV Outlook 2019 explores the future development of electric mobility through two scenarios: the New Policies Scenario, which aims to illustrate the impact of announced policy ambitions; and the EV30@30 Scenario, which takes into account the pledges of the Electric Vehicle Initiative’s EV30@30 Campaign to reach a 30% market share for EVs in all modes except two-wheelers by 2030. In the New Policies Scenario in 2030, global EV sales reach 23 million and the stock exceeds 130 million vehicles (excluding two/three-wheelers). In the EV30@30 Scenario, EV sales and stock nearly double by 2030: sales reach 43 million and the stock numbering more than 250 million. China maintains its world lead with 57% share of the EV market in 2030 (28% excluding two/three-wheelers), followed by Europe (26%) and Japan (21%). In the EV30@30 Scenario, EVs account for 70% of all vehicle sales in 2030 (42% excluding two/three-wheelers) in China. Almost half of all vehicles sold in 2030 in Europe are EVs (partly reflective of having the highest tax rates on fossil fuels). The projected share of EVs in 2030 in Japan is 37%, over 30% in Canada and the United States, 29% in India, and 22% in aggregate of all other countries. With the projected size of the global EV market (in particular cars), the expansion of battery manufacturing capacity will largely be driven by electrification in the car market. This supports increasing consensus that the electrification of cars will be a crucial driver in cutting unit costs of automotive battery packs.

The projected EV stock in the New Policies Scenario would cut demand for oil products by 127 million tonnes of oil equivalent (Mtoe) (about 2.5 million barrels per day [mb/d]) in 2030, while with more EVs the in the EV30@30 Scenario the reduced oil demand is estimated at 4.3 mb/d. Absent adjustments to current taxation schemes, this could affect governments’ tax revenue base derived from vehicle and fuel taxes, which is an important source of revenue for the development and maintenance of transport infrastructure, among other goals. Opportunities exist to balance potential reductions in revenue, but their implementation will require careful attention to social acceptability of the measures. In the near term, possible solutions include adjusting the emissions thresholds (or the emissions profile) that define the extent to which vehicle registration taxes are subject to differentiated fees (or rebates), adjustments of the taxes applied to oil-based fuels and revisions of the road-use charges (e.g. tolls) applied to vehicles with different environmental performances. In the longer term, gradually increasing taxes on carbon-intensive fuels, combined with the use of location-specific distance-based approached can support the long-term transition to zero-emissions mobility while maintaining revenue from transport taxes. Location-specific distance-based charges are also well suited to manage the impacts of disruptive technologies in road transport, including those related to electrification, automation and shared mobility services.

Electricity demand from EVs in the New Policies Scenario is projected to reach almost 640 terawatt-hours (TWh) in 2030 (1 110 TWh in the EV30@30 Scenario), with LDVs as the largest electricity consumer among all EVs. Since EVs are expected to become more relevant for power systems, it is important to ensure that their uptake does not impede effective power system management. Slow chargers, which can provide flexibility services to power systems, are estimated to account for more than 60% of the total electricity consumed globally to charge EVs in both scenarios in 2030. Since buses account for the largest share of fast charging

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demand, concentrating these consumption patterns to low demand periods such as at night can constructively impact the load profile in a power system.

Policies and market frameworks need to ensure that electric mobility can play an active role in increasing the flexibility of power systems. By providing flexibility services, electric mobility can increase opportunities for integration of variable renewable energy resources into the generation mix, as well as reducing cost associated with the adaptation of power systems to increased EV uptake. Electricity markets should facilitate the provision of ancillary services such as grid balancing that are suitable for EV participation and allow for the participation of small loads through aggregators. To participate in demand response in the electricity market, aggregators should not face high transaction costs (including not only fees, but also other regulatory, administrative, or contractual hurdles) to be able to pool large numbers of small loads.

On a well-to-wheel basis, projected greenhouse gas (GHG) emissions from EVs by 2030 are lower at a global average than for conventional internal combustion engine (ICE) vehicles. In the New Policies Scenario, GHG emissions by the EV fleet reach roughly 230 million tonnes of carbon-dioxide equivalent (Mt CO2-eq) in 2030, offsetting emissions of about 220 Mt CO2-eq that would have resulted from a fleet of ICE vehicles of equivalent size. In the EV30@30 Scenario, the assumed trajectory for power generation decarbonisation is consistent with the IEA Sustainable Development Scenario and further strengthens GHG emissions reductions from EVs compared with ICE vehicles.

At global level, battery electric cars (BEVs) and plug-in hybrid electric cars (PHEVs) using electricity characterised by the current global average carbon intensity of electricity generation (518 grammes of carbon-dioxide equivalent per kilowatt-hour [g CO2-eq/kWh]) emit a similar amount of GHG as hybrid vehicles and less GHGs than a global average ICE vehicle using gasoline over their life cycle. The impact however differs strongly by country. CO2 emissions savings are significantly higher for electric cars used in countries where the power generation mix is dominated by low-carbon sources and the average fuel consumption of ICE vehicles is high. In countries where the power generation mix is dominated by coal, very efficient ICEs, such as hybrid vehicles, exhibit lower emissions than EVs. In the future, the emissions reduction potential over the life cycle of EVs can rise further the faster electricity generation is decarbonised.

The EV uptake and related battery production requirements imply bigger demand for new materials in the automotive sector. The demand for cobalt and lithium is expected to significantly rise in 2030 in both scenarios. Cathode chemistries significantly affect the sensitivity of demand for metals, particularly cobalt. Both cobalt and lithium supplies need to scale up to enable the projected EV uptake. The scale of the changes in material demand for EV batteries also calls for increased attention to raw material supplies. The challenges associated with raw material supply relate primarily to the ramp-up of production, environmental impacts and social issues. Traceability and transparency of raw material supply chains are key instruments to help address some of these criticalities by fostering sustainable sourcing of minerals. The development of binding regulatory frameworks is important to ensure that international multi-stakeholder co-operation can effectively address these challenges. The battery end-of-life management is also crucial to reduce the dependency of the critical raw materials needed in batteries and to limit risks of shortages. Relevant policy options to address this are within the 3R framework (reduce, reuse and recycle) and specifically within the reuse and recycle components.

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